Aug 7, 2019
Global equities were trying to stabilize around the world overnight and this morning. Chinese equities were modestly lower, Japanese stocks were mixed, and Europe was rallying. US futures, for their part, were positive but have now given up all of those early gains and are firmly negative. Oil is modestly lower, precious metals like gold and silver are breaking out, while cyclical metals like copper are flat and iron ore is in free fall with a five-day decline of over 20% as trade fears hurt the outlook for global growth. The real story this morning is the collapse in yields both here in the US and around the world.
Continue reading in today’s Morning Lineup.
Bespoke Morning Lineup – 8/7/19
Aug 6, 2019
Where she stops nobody knows. US futures have moved all over the place overnight but are currently pointing to a modestly higher open after Monday’s plunge. Things looked like they would be a whole lot worse shortly after the close yesterday when the US Treasury officially designated China a currency manipulator in what was basically a “surprising-not surprising move.” Surprising in that the timing wasn’t entirely anticipated but not surprising as it’s nothing the President hasn’t been saying incessantly going all the way back to his days on the campaign trail. Well, the initial response from the algos was to sell spoos lower to the tune of 2%, but after the Chinese government fixed the yuan under 7 later on in the night, futures have been grinding higher, erasing all of the initial knee-jerk reaction.
With equity futures rallying, we’re seeing the usual risk-on assets rallying while treasuries and gold ease off their overnight highs. During rudderless times like this, though, it’s important to remember that up futures are as meaningless as down futures in terms of where things will be when we close out the day or even at the open for that matter.
Continue reading in today’s Morning Lineup.
Bespoke Morning Lineup – 8/6/19
Aug 5, 2019
“…verge of a very dangerous situation.” Take your pick as to the litany of issues here at home and around the world that this statement could be referring to this morning, but in this case it was a quote from the Chief Executive of Hong Kong, Carrie Lam, describing the current state of tensions in that city following what has now become nine straight weeks of protests.
The big issue this morning, however, is the further escalation of the trade war as China responded to President Trump’s tweets from Thursday by reportedly instructing state-owned corporations to halt imports of US agricultural products, and more importantly, allowing the yuan to float above 7.
After a weak session of trading on Friday, global equities are in further liquidation as major Asian and European equity benchmarks are down close to 2% and US futures are trading down over 1%. Keep in mind too, that US stocks were down every day last week with the S&P 500 falling over 3%. Treasury yields are down sharply again this morning with the 10-year down to 1.77%, and the yield curve (10y/3m) is at new extremes in terms of inversion.
Continue reading in today’s Morning Lineup.
Bespoke Morning Lineup – 8/5/19
Aug 2, 2019
Normally, the first Friday of the month is a day where everyone on Wall Street is freaking out about the latest jobs report. After yesterday’s tweetstorm by the President, though, jobs have taken a back seat.
Global markets are still reeling in the aftermath of the President’s new round of tariffs scheduled to take effect on 9/1. Interest rates around the world are plunging, stock markets have taken hits squarely on the chin, and the President’s attempt to jolt markets (thereby forcing the Fed’s hand into rate cuts) has continued.
The US equity market is set to open 35 bps lower despite a small rally off session lows, the Treasury curve is aggressively bull flattening as longer-term bonds price in risks of a recession while the front end prices a slightly easier Fed, and the dollar declines modestly.
Continue reading in today’s Morning Lineup.
Bespoke Morning Lineup – 8/2/19
Aug 1, 2019
After plunging during Powell’s presser yesterday, S&P 500 futures have staged a modest rebound; they’re currently trading consistent with a 20 bps gain versus yesterday’s close. The dollar is now trading at 7-month highs after the Bloomberg USD Index gained 44 bps yesterday. Since June 25th lows, the buck has gained consistently but the total advance is only 2.2%, so it’s hard to argue things are getting out of hand.
One of the harder-hit areas by the more hawkish (relative to expectations) Fed yesterday is commodities where WTI is down 1.3%, gold is down 1.6%, and copper is down 63 bps versus yesterday’s pre-Fed levels. For their part, yield curves are higher this morning, with 2s5s steepening but 5s10s or 5s30s flattening as the belly of the curve gets the worst of traders’ reassessment about the path of FOMC policy through the rest of the year and into 2020.
PMIs overnight were generally weaker sequentially (discussed in greater detail in today’s report), but a number beat expectations. Finally, earnings are generally positive in the US and Europe this morning, with US names like GM, Cigna, Verizon, Shopify, Yum! Brands, and Wayfair all reporting big beats of one kind or another.
Continue reading in today’s Morning Lineup.
Bespoke Morning Lineup – 8/1/19
Jul 31, 2019
US futures are slightly higher this morning, and the gains are being led by Apple (AAPL), which is set to gap up more than 4% following earnings last night. For Apple (AAPL), it was the company’s 4th Q2 earnings triple play in a row, meaning the company has beaten EPS estimates, beaten sales estimates, and raised guidance on its Q2 report for four consecutive years. If the stock opens where it’s trading now, it will be the 4th year in a row that AAPL has gapped higher by 4%+ on Q2 earnings as well.
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